Educational World Limited (t/a Winston House Preparatory School) v Wharton

A written employment contract is construed objectively, by asking what its words would convey to a reasonable person with the relevant background knowledge. Clear, school-specific published term dates govern a clause requiring notice to expire at the end of the term.

Separate provisions for paid holidays do not alter the contractual end date. Nor may practice or contractual arrangements concerning public-sector teachers be imported into a private school contract without a proper contractual basis.

A teacher resigned from a private preparatory school before the first teaching day of the summer term. Her contract required a full term’s written notice, given before the first teaching day of a term, to expire at the end of that term.

The Employment Judge held that the summer term ended on 31 August 2011, relying on holiday-pay provisions and public-sector teaching practice, and awarded unpaid wages for the period after 8 July. The school appealed. The issue was whether, on the proper construction of the contract, the notice expired on 8 July or 31 August 2011.

1. Appeal allowed. The Employment Judge erred in law in construing the notice clause. The order awarding the teacher unpaid wages was quashed.

2. Contractual interpretation is objective. The question is what the agreement would convey to a reasonable person with the background knowledge reasonably available to the parties, rather than what either party personally intended or understood.

3. Clause 1.5 required notice given before the first teaching day of a term to expire at the end of that term. The school’s published dates expressly defined the 2011 summer term as ending on 8 July 2011. Those dates therefore supplied the contractual end date.

4. The paid-holiday clause was separate from the termination clause and could not establish that employment continued through the following holiday period. Public-sector teachers’ arrangements were not incorporated into, and could not form part of the relevant background for construing, this private school’s specific contract.

5. The teacher’s belief that her notice ran to 31 August, and the school’s contrary belief, were not relevant to the objective construction. Notice given on 26 April 2011 was effective to terminate employment at the end of the published summer term, 8 July 2011.

• Employment Appeal Tribunal: Appeal allowed; the Employment Judge’s declaration of an unauthorised deduction from wages and monetary order were quashed.
• Employment Tribunal, East London: On 6 December 2011, held that employment ended on 31 August 2011 and awarded unpaid wages for the period after 8 July.